Permian water pipeline developer, city of Lubbock partner

By Luke Geiver | October 29, 2019

The city of Lubbock, Texas, has signed a deal with Palisade Pipeline LLC to supply the oilfield midstream firm backed by Macquarie Capital with up to 6 million gallons per day of non-potable reclaimed water.

Macquarie announced this week that it will provide development capital to Palisade to build out the infrastructure needed for a high capacity water pipeline capable of moving the non-potable water from Lubbock southwest to the Permian Basin oilfields of Texas and New Mexico.

“We are pleased to partner with Palisade in developing this innovative project,” said Nicholas Gole, head of Americas Energy Principal Investments for Macquarie Capital. “This pipeline will provide a sustainable source of quality water to an area with increasing demand and limited water supply.”

Dan Pope, Mayor of Lubbock, said the city had water it couldn’t reuse and Palisade approached the city about utilizing the source. The water typically cost the city roughly $1 million per year to dispose of. Palisade formed a long-term takeaway contract with the city that included a drought provision in the contract in case the city needed the water for undetermined uses.

Costs of the pipeline project or buildout were not disclosed.